Modern monetary theory - Mitchell and Wray Q4

[WilhelmDrake]

Only a small percentage (~3%) of money is created by the government.  The remainder is created by private banks who are given a legal privelege to create credit through bank loans.

[dilbertgeg]

@WilhelmDrake private banks create two things at once: Deposits and Loans. From the banks' perspective, the deposits (say in a car company's account) is a liability, while the loan (to the consumer) is an asset. These net to zero. Only the govt creates net NEW money.

[WilhelmDrake]

@dilbertgeg

"Only the govt creates net NEW money."

Yes, I am aware of this but at any particular time the money supply is composed of ~95% of private bank credit. This is what I was referring to, not net money.